Voluntary benefits continue to be a smart way to attract and retain talent. More than 90 percent of employers now offer at least one as part of their benefits program, according to Mercer’s National Survey of Employer-Sponsored Health Plans. A flexible benefits package can provide a competitive advantage, one that attracts highly talented people and retains them longer.
What do your employees want from their benefits overall? Remember, you have potentially five distinct generations making up your employee population — and each one has specific benefits needs.
Keep in mind, the Equal Employment Opportunity Commission (EEOC) frowns on any offerings that overtly or even appear to discriminate. So, if you offer pet insurance to one generation, you really have to offer it to someone in another generation as well. It’s also a good idea to run any benefits structures by an attorney who is well-versed in Employment law, just to make sure.
Similar concerns but specific needs
All employees share some common concerns, but the specifics they require can be as different as the generations themselves.
According to PricewatershouseCooper, 53 percent of employees worry about their current financial well-being and 47 percent say their stress level related to those financial issues has recently increased. But what’s behind those financial concerns can vary greatly.
Oppressive student debt is a primary concern for Millennials and Gen Z. Gen-Xers have concerns about managing debt as well as paying for their children’s education. Fear of not having enough for retirement is most pressing for the oldest segments of the employee population.
One benefits size does not fit all
Your employee population is more diverse than ever. What they want from their benefits reflects that. In fact, according to the HR Blindspot Report from 2018, 91 percent of employees believe companies should offer personalized benefits packages. If you can customize benefits to accommodate an individual’s interests and goals, that will go a long way towards making sure that employee feels valued.
Looking beyond the core offerings like health care, retirement savings plans and a range of medical benefits, employers can offer a comprehensive menu of non-medical voluntary benefits that make it easy for employees to select options suited to their individual needs. Those might include legal insurance, tuition reimbursement, on-site child care, student debt assistance, caregiver leave, ID theft prevention services and even, yes, pet insurance.
Innovative companies understand that offering benefit programs that speak to their employees can set them apart from the competition. Some expand their benefits to support employees at all life stages — increasing maternal leave, parental leave and bereavement as well as caregiver leave benefits.
The five generations you need to satisfy
Companies used to speak to their employee population as one group. Then came the Baby Boom. Then the Boomers had kids, and then younger Boomers did as well. So, now there are potentially five employee groups that need to be understood and appreciated in terms of how you communicate with them and what you offer them: Traditionalists, Baby Boomers, Gen Xers, Gen Y (Millennials), and, now, Gen Z.
Traditionalists (pre-1946) are strongly focused on their careers and largely adhere to social norms; typically single-company loyalty
This group focuses on pay, health insurance, and retirement plans. They emphasize and value loyalty, respect for authority, dedication, sacrifice, honor, and discipline. They are motivated by flexibility, autonomy in their work, and working on preferred jobs or projects. They often need creative compensation packages; crave appreciation and recognition; and enjoy the satisfaction of a job well done.
They desire traditional benefit packages, defined benefit retirement plans, and conventional vacation/time off. Certain standard health and insurance benefits are not appealing to them if they have Medicare. Traditionalists also want coaching focused on improving their strengths.
Baby Boomers (1946-1964) are generally hardworking and motivated by position, perks, and prestige; they often define themselves by their professional accomplishments.
Baby Boomers value salary level, health insurance — including dental and vision — life insurance, and a retirement plan. They are motivated by money, titles, recognition of hard work, and respect. They want to be told they are valued and needed.
Wellness perks, like discounted gym memberships or even healthy snacks, can be a helpful perk employers can offer for workers looking to maintain a healthy lifestyle.
For Boomers, flexible working options can be a huge draw. Employees who are caring for an aging parent or loved one will particularly appreciate this benefit. And Boomers are planning for retirement, so salary plays a big role as does access to retirement savings options.
Generation X (1965-1980) is less committed to a single employer and willing to change jobs to get ahead; they’re more tech savvy than previous generations and place strong value on work-life balance.
Gen Xers value salary level, a 401K plan with matching benefits, job security, advancement within the company, and opportunities for work-life balance, such as flex time, child care, financial protection and education, and well-being support. Gen X also favors benefits that support career growth and development, perks that relate directly to job security, a key concern among this cohort.
Gen X workers are motivated by incentives tied to individual results, access to the best office technology rather than the corner office. Gen Xers desire pay increases tied to their own performance, and personal rewards for results. They also expect coaching to be focused equally on improving both strengths and weaknesses.
Generation Y (Millennials) (1981-1996) don’t live up to the cliché that they just want an office ping pong table or beer fridge. But if one stereotype is true, it’s their value of independence and flexibility in their work. Millennials want paid time off, ability to work remotely, control over their schedules, and a great deal of choice and flexibility.
According to Payscale, 34 percent of Millennials have quit their jobs because work flexibility was not an option, 14 percent have considered leaving their current positions due to the lack of flexibility, and 24 percent are actively seeking a new job because of “work flexibility issues.”
A study by the ARAG insurance group found that Millennials prioritize medical benefits over everything else, followed closely by dental benefits, but they are more cost-conscious than other generations. And, while every generation faces some legal risk and uncertainty at different stages of their lives, the ARAG study found Millennials are more likely to purchase legal insurance (41 percent) compared to other generations (30 percent all other).
They also have real concerns about finance with many servicing large outstanding college loans. And they appreciate spot awards and non-financial incentives like group outings as well as charitable and travel rewards.
Generation Z (1997- ) was raised with an iPhone or Android device in their hands. They are more entrepreneurial and wary of corporate America than their older peers, and they value development opportunities.
This generation welcomes a casual dress code that helps them control wardrobe costs; healthy food offered onsite for free or at low cost; a safe place to lock up their bikes or scooters; and opportunities to work remotely. They also value career advancement and flexible work arrangements.
Studies done by the Society for Human Resource Management (SHRM) show that they are also looking for financial guidance to handle debt and personal finances. Debt, and student debt in particular, is a huge concern for people in this age group. According to HR Dive, 46 percent of Gen Z is worried about student debt.
Gen Z also wants more mental health support from their employers. For employers, providing access to an Employee Assistance Program (EAP) or counseling is becoming a viable and affordable option.
Such packages could offer core benefits like salary increases, health insurance and a retirement plan or 401K, in addition to a menu of choices like paid time off, flex time, professional development opportunities and other choices. A group like this provides a core plan that appeals to all ages, yet is flexible enough to satisfy Millennials and Gen Xers.
Offering core packages plus benefits choices sounds great on paper, but launching and managing such a plan can be a headache. Keeping track of all the choices can be incredibly challenging to administrate. The good news is, a lot of payroll software systems let you track benefits on an individual level so you can keep a close eye on everything.
To create a benefits program that appeals to multiple generations, you need to understand their shared concerns and distinct needs. Ask for suggestions; you may be surprised by the answers. The only way to find out what benefits will truly resonate with your employees is to ask them.
Content provided in partnership with Marsh & McLennan Agency. This content is for informational purposes only. Consult your actual insurance policy for details regarding terms, conditions, coverage, and exclusions.